Tether is winding down the Alloy project and the aUSDT token: what lies behind the issuer's decision
Tether, the issuer of the largest stablecoin, has announced the phased closure of its Alloy by Tether platform and the associated aUSDT token. This asset was a dollar-pegged stablecoin overcollateralized by tokenized gold, Tether Gold (XAUt). The decision takes effect immediately, and the first phase has already been launched: users can no longer open new positions or mint new aUSDT.
Current aUSDT holders are given a three-month period to redeem their tokens and withdraw their XAUt collateral. From September 17, those who do not return aUSDT will lose the ability to retrieve their collateral directly through the platform. This move is not spontaneous but the result of a thorough analysis of the market situation and Tether's internal priorities.
Why did Alloy fail to meet expectations?
Alloy by Tether was launched exactly one year ago — on June 17, 2024. The core idea of the project was to provide users with dollar liquidity without the need to sell tokenized gold. To achieve this, aUSDT was overcollateralized: the value of the locked XAUt exceeded the volume of issued tokens. However, as practice has shown, demand for this instrument proved to be extremely limited.
At the time of closure, Alloy's market capitalization was estimated at only $1.2 million, with gold reserves in collateral amounting to 14.73 kg, worth approximately $2.2 million. For comparison, the market value of XAUt itself reaches $3 billion, with collateral of 22,169 kg of precious metal. The difference is enormous, and this directly indicates the low demand for the product.
Tether explained the closure by reviewing user activity and market demand. The company intends to focus resources on developing XAUt and other key ecosystem products. According to representatives, Alloy helped test the hypothesis about demand for gold digital assets and collateral products, but the results were insufficient to continue.
Trend towards streamlining the product line
This is not the first time Tether has abandoned non-core assets. In February, the company discontinued the development of the CNHT stablecoin, pegged to the Chinese yuan, citing changing market conditions and low interest. And in November 2025, the EURT stablecoin, based on the euro, was wound down, explained by regulatory complexities in Europe and a focus on the Hadron tokenization platform.
This strategy speaks to Tether's pragmatic approach: the company is not afraid to close projects that do not deliver expected returns and concentrates on the most promising areas. As a reminder, based on the results of the first quarter of 2026, the issuer's net profit amounted to $1.04 billion, confirming its financial stability and ability to make tough but balanced decisions.
Analyst's opinion: The closure of Alloy and aUSDT is a logical step for Tether, demonstrating market maturity. A product with a market cap of $1.2 million could not compete with major stablecoins and tokenized assets. However, the very fact that such experiments exist is useful: it shows that even large players test hypotheses and abandon unsuccessful ones without wasting resources. For investors, this is a signal that Tether remains disciplined and focused on long-term goals.